Oncor, Vysis differ on ruling Gaithersburg firm says it can prevail in patent lawsuit


September 04, 1997|By Mark Guidera | Mark Guidera,SUN STAFF

Oncor Inc.'s president said yesterday that the company is confident it can successfully defend itself against TC patent-infringement lawsuit filed by a competitor, even though a federal judge in San Francisco found two weeks ago that at least one of Oncor's product lines may violate the patent.

"We feel pretty good about this. The judge ruled that our other products did not violate the patent," said Cecil Kost, Oncor's president and chief operating officer.

But William E. Murray, a lawyer for Vysis Inc., a Downers Grove, Ill., genomics company that filed the suit, disagreed with that assessment. Murray said the court left open for trial whether other Oncor products, including genetic tests it has developed for hereditary breast cancer, violate the patent.

"I don't think they can prevail," Murray said.

At stake in the suit is the emerging multimillion-dollar world market for clinical tests for cancer and other diseases developed using the technology.

Oncor has at least one such test -- for hereditary breast cancer -- awaiting Food and Drug Administration approval.

"This is a fight for the strategic interests in the clinical diagnostics market," Murray said.

The suit was filed by Vysis and the University of California in September 1995.

Chromosomal probes

At issue is whether Oncor's use of probes for detecting the location of unique chemical codes, or "sequences," of DNA violates a patent issued to two University of California scientists, Joe W. Gray and Daniel Pinkel.

In the suit, Vysis contends that Gaithersburg-based Oncor, which markets and develops genetic tests for cancer and other diseases and also sells genetic materials to researchers, uses at least 103 different probes that violate the patent.

The patent covers Gray and Pinkel's invention of a more efficient way to mark chromosomes for identification and determine the location of DNA on chromosomes, found in cell nuclei. Their process, in part, involves blocking out "junk" DNA codes, which are repetitive. The scientists dubbed their process "chromosome specific staining."

Vysis obtained a license for worldwide rights to the technology in 1989 from the University of California.

In his ruling Aug. 19, U.S. District Judge Vaughn R. Walker said that at least one line of Oncor's DNA probes, marketed under the Coatasome label, would infringe claims in the patent if Oncor is unable to prove that the patent is invalid and unenforceable.

Oncor argued in its court filings that the patent is not valid or enforceable because Gray and Pinkel withheld scientific information from the patent examiners and therefore obtained it fraudulently.

Oncor also contends that its probes do not violate the scientists' patent because Gray and Pinkel were not the first to practice using the process.

Murray said those contentions are false.

"They have a very difficult burden of proof ahead," he said.

Meanwhile, in an Aug. 29 letter to its customers, Kost said Oncor would legally protect customers who purchase and use the Coatasome probes until the suit is resolved.

The Coatasome probes account for about 5 percent of total sales, Oncor said.

The publicly held company reported a net loss of $14.9 million on revenue of $6.9 million for the first six months of 1997.

Judge Walker also said in his ruling that he likely would appoint an outside expert to advise him during the jury trial because of the "unusual difficulty and complexity" of the case.

The judge set a conference Oct. 3 to discuss that appointment. The trial is expected to begin early next year. Vysis is not seeking specific damages in its suit, but plans to ask the jury to settle that issue if it wins the case, said Murray, Vysis' lawyer.

Pub Date: 9/04/97

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